Whanganui District Council on track to complete $13.4m cost saving plan

The council has yet to hand over the Rotokawau Virginia Lake aviary to its new owner, community organisation Friends of the Aviary. Photo / NZME

Whanganui District Council is on track to hit cost-saving and revenue targets of $13.4 million and avoid “a little bit of extra borrowing”.

A report from chief executive David Langford said about $5.7m of savings and non-rates revenue had been made by the end of September - a quarter of the way through the financial year.

Last December, the council announced a six-point plan to keep rates down for 2024/25, by increasing the ratepayer base, improving council efficiency, exploring alternative funding, cutting council services, selling assets and identifying non-rates revenue.

Whanganui had an average rates rise of 11.2% this year.

Just over $1m in service cuts was targeted, with reduced library hours already guaranteeing $30,000.

The report said bringing economic development agency Whanganui and Partners in-house had saved $779,304 of a $900,000 target but the $150,000 saving for the closure of the Rotokawau Virginia Lake bird aviary was yet to be realised.

Langford told councillors he was meeting with Friends of the Aviary - the group taking over the facility - to finalise a handover.

“There are a few things to put in place like the lease for the ground underneath the aviary and a sale and purchase agreement for the structure.”

The council budgeted for development contributions of $600,000 for 2024/25 but had received $18,002 by the end of September.

Langford said the target was unlikely to be hit because there was a rush of building applications earlier in the year “so they could pay under the old policy”.

A new policy, which moves from a site-based to an occupancy-based measure, took effect on July 1.

“Hopefully we compensate in other areas and meet the overall target,” Langford said.

An increased ratepayer base, budgeted to bring in $600,000, is still at 0%.

Langford said that could not be measured until closer to the end of the financial year.

Examples of non-rates revenue include car parking ($1.716m budgeted; $512,793 to date) and returns on the council’s property portfolio ($1.5m budgeted; $372,242 to date).

Earlier this year, councillors voted unanimously for more parking meters and higher charges in the CBD, with an increase from $2 to $3 an hour on Victoria Ave and parking charges on side streets and off-street parks increasing to $2 from 50 cents (off-street) and $1 (side street).

Whanganui District Council chief executive David Langford. Photo / NZME

Langford told the Chronicle if the $13.4m target was not met, the council would need to draw down debt.

“Council would finish the financial year with a deficit, which would be funded with a little bit of extra borrowing.

“It won’t be ideal but it won’t have a major financial impact on council or the ratepayer.”

The council finished the 2023/24 financial year with a $1.58m deficit.

In September, Langford said that was “a relatively good outcome” considering insurance costs increased by $1.65m above budget.

Reducing insurance premiums - part of efficiency savings - is budgeted at $390,000 for 2024/25.

The council signed off about $240,000 in reductions this month (after Langford’s report was released), including material damage insurance for the velodrome and Durie Hill Memorial Tower.

The report said a “fleet review” had brought efficiencies of $31,329 (target $50,000).

Councillor Ross Fallen said he had heard people say the council had “40 or 50 expensive vehicles and we’re spending $5m on electric cars”.

“This is all news to me,” he said.

Langford said the council had 50 vehicles, ranging from Suzuki Swifts to utes with cranes.

Savings made so far had come from removing and selling three vehicles with low use from the council’s fleet, he said.

For Year 2 of the council’s long-term plan (2025/26), the council is predicting an average rates rise of 6.6%.

Speaking to the Chronicle, Langford said he thought the council could “do better” than 6.6% but work would not start on next year’s budgets until late November.

“All options are on the table but we need time to get into it and see what’s possible.”

Mike Tweed is a multimedia journalist at the Whanganui Chronicle. Since starting in March 2020, he has dabbled in everything from sport to music. At present his focus is local government, primarily the Whanganui District Council.